Coronavirus: China, Asia manufacturing recovery to be short-lived with 2020 growth set to grind to a halt

Asia-Pacific growth is set to be zero, worst than the global or the Asian financial crisis’, says International Monetary Fund Asia and Pacific Department chief

Changyong Rhee says any recovery in the manufacturing sector in China and the rest of Asia needs to be viewed with caution

3-MIN READ3-MIN

The International Monetary Fund (IMF) has forecast global growth to contract by 3 per cent in 2020, meaning the downturn will be the worst since the Great Depression of the 1930s. Photo: Reuters

Published: 1:31pm, 16 Apr 2020Updated: 10:37pm, 16 Apr 2020

Any recovery in the manufacturing sector in China and the rest of Asia this year will be short lived as Asia-Pacific’s growth in 2020 is expected to grind to a halt amid the coronavirus outbreak, according to the director of the International Monetary Fund’s Asia and Pacific Department.

Changyong Rhee reinforced the severity of the impact of Covid-19 on Asia-Pacific economies, noting that growth in the region would be zero this year, much worse than the global or the Asian financial crisis’, when growth was 4.7 per cent and 1.3 per cent respectively.

Successful containment policies could lead to a recovery in 2021, but with most sectors in China and Asia-Pacific having been pummelled, any recovery would need to be viewed with caution, even though manufacturing activity in China picked up earlier this month.

“We see some evidence the manufacturing sector is not much affected yet … in China, after February we see some signs of recovery in manufacturing activity too, but I think that trend will not last,” Rhee said during an International Monetary Fund (IMF)-World Bank spring meetings briefing in the United States on Wednesday.

I think except a few companies which sell medical products, medicines and some IT-related products, they might get some boost, but otherwise there is no winner in this crisis

Changyong Rhee

“We are expecting global trade will shrink by close to 11 per cent this year, so manufacturing will be hit hard again.